IATA suspends Kingfisher from clearing house

Thursday, 8 March 2012 00:00 -     - {{hitsCtrl.values.hits}}

Reuters: The International Air Transport Association (IATA) suspended Kingfisher Airlines(KING.NS) from its clearing house effective Wednesday due to non-payment of fees, dealing a fresh blow to the ailing carrier as it seeks funds to stay aloft.

 The industry group's clearing house, ICH, settles accounts between the world's airlines, airline-associated companies and travel agencies.

"Kingfisher's participation in the ICH will be reinstated after the airline fulfills the ICH requirements," IATA spokesman Albert Tjoeng said in an email. Kingfisher can still partner with other airlines by settling with them directly, he said.

A Kingfisher spokesman said the airline would issue a statement later.

About 240 airlines, representing about 84 percent of global scheduled airline traffic, belong to the IATA, whose role includes helping airlines partner with each other.

Adding to Kingfisher's troubles, CNBC-TV18 reported that Indian tax authorities had issued "show-cause" notices to the airline's top management, asking them to explain why the airline had not paid about 3 billion rupees of tax. Kingfisher has 10 days to respond, the TV channel said.

Tax authorities froze its bank accounts last month.

Kingfisher, headed by liquor tycoon Vijay Mallya, has never made a profit since it was founded in 2005 and has grounded more than half of its planes as it struggles to pay staff and creditors and scrambles to find investors.

The airline, which has a debt of about $1.3 billion, needs at least $400 million soon to keep flying, according to the Centre for Asia Pacific Aviation, an industry consultancy.